The Global Economic Impact of Private Equity Report 2008 - World ...

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Exhibit 2: An illustration of glass industry cyclicalityPrices have started to recover since early 2006 due to slowdown in growth of additional capacities10090807060504030202002 2003 20042005 20064m 5m 8m 10mSource: Company documents.Exhibit 3: Time line of the Hony-China Glass transactionIPO in HKSEIdentified DD Signed investment Received US$25m loan to Two acquisitionsopportunity agreement & wired funds modernized production line expectedJune 2003 2004 2005 2006Met CEO andconducted pre-DDRestructured governance, improvedbusiness, re-capped financial structureSigned “trustee agreement” Signed MOU Teamed with Pilkington towith local government with Pilkington consolidate glass industrySource: Company documents.124 Case studies: Hony Capital and China Glass HoldingsThe Global Economic Impact of Private Equity Report 2008
Exhibit 4: Members of the China Glass board of directors (as of June 2005, prior to IPO)Executive DirectorsMr Zhou Cheng, aged 48, is an executive director ofour company and our Chief Executive Officer. Mr Zhouis a senior engineer. He graduated from Nanjing Instituteof Chemical Engineering in 1980, majoring in inorganicchemistry. Mr Zhou joined the Group in January 1997 andhas previously served as head of Jiangsu Glass Factoryand chairman and general manager of Jiangsu Glass Group.He has 25 years of experience in the inorganic chemicalindustry, the building materials industry and enterpriseadministration and management.Mr Li Ping, aged 44, is an executive director and seniorvice president of our company and Chairman of the board ofSu Hua Da. He graduated in 1982 from Zhejiang University,majoring in materials, with a Bachelor’s in Engineering anda Master’s in Business Administration. He is a BA seniorengineer at postgraduate level. Mr Li joined the Group inFebruary 1982 and has formerly worked as deputy headof Jiangsu Glass Factory, deputy general manager andgeneral manager of Jiangsu Glass Group. He has 23years of experience in the building materials industryand enterprise management.Mr Lu Guo, aged 42, is an executive director and vicepresident of our company, a director and general managerof Su Hua Da. Mr Lu is a senior engineer. He graduated in1984 with a Bachelor’s degree from Wuhan Institute ofBuilding Material, majoring in glass. Mr Lu joined the Groupin August 1984 and has worked as head of a branch factoryof Jiangsu Glass Factory, assistant to the general managerand deputy general manager of Jiangsu Glass Group. Hehas over 20 years of experience in the PRC glass industry.Non‐Executive DirectorsMr Liu Jinduo, aged 66, is a non‐executive director of ourcompany. Mr Liu has extensive experience in enterprisemanagement. Before retiring in 2001 he served as vicepresident of Legend Holdings Limited. He is currentlyalso a director of Easylead Management Limited and wasappointed as a Director of our Company in January 2005.Independent DirectorsMr Song Jun, aged 44, is an independent non‐executivedirector of our company. Mr Song graduated from TsinghuaUniversity in 1990 with a PhD in Physics. Mr Song hasserved as a senior manager in numerous affiliated companiesof Tsinghua University and has extensive experience inmanagement and operations. Mr Song is currently alsothe deputy secretary of Tsinghua University as well asthe chief executive officer of Tsinghua Holdings CompanyLimited and was appointed as a Director of our Companyin January 2005.Mr Zhang Baiheng, aged 44, is an independentnon‐executive director of our Company. He was an officerof the China Air Force. Mr Zhang has extensive experiencein the building material industry, and he currently serves asthe general secretary of the China Architectural and IndustrialGlass Association and was appointed as a Director of ourCompany in January 2005.Mr Wong Wai Ming, aged 47, an independentnon‐executive director of our company, is the former chiefexecutive officer of Sing Tao News Corporation Limited,a listed company in Hong Kong principally engaged in mediaownership and services, human capital management andbroadband content and distribution. Mr. Wong is a charteredaccountant and holds a Bachelor’s in Science from theUniversity of Manchester, Institute of Science and Technologyin the UK. Mr Wong is also an independent non‐executivedirector of Lenovo Group Limited and Linmark GroupLimited; both companies are listed on the Main Boardof the Stock Exchange. He was appointed as a Directorof our Company in January 2005.Source: China Glass IPO prospectus, 13 June 2005.Mr Zhao John Huan, aged 42, is a non‐executive directorof our company and the Chairman of our board of directors.Mr Zhao graduated from Nanjing University with a Bachelor’sdegree and from Northwestern University in the US with aMaster’s degree. Mr Zhao has extensive experience in seniormanagement positions at several US and PRC companies.Mr Zhao is currently a vice president of Legend HoldingsLimited and was appointed as a Director of our Companyin January 2005.The Global Economic Impact of Private Equity Report 2008 Case studies: Hony Capital and China Glass Holdings 125
Page 2 and 3:
The Globalization of Alternative In
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ContributorsCo-editorsAnuradha Guru
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PrefaceKevin SteinbergChief Operati
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Letter on behalf of the Advisory Bo
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Executive summaryJosh lernerHarvard
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• Private equity-backed companies
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C. Indian casesThe two India cases,
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Part 1Large-sample studiesThe Globa
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The new demography of private equit
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among US publicly traded firms, it
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should be fairly complete. While th
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according to Moody’s (Hamilton et
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draining public markets of firms. I
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FIguresFigure 1A: LBO transactions
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TablesTable 1: Capital IQ 1980s cov
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Table 2: Magnitude and growth of LB
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Table 4: Exits of individual LBO tr
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Table 6: Determinants of exit succe
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Table 7: Ultimate staying power of
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Appendix 1: Imputed enterprise valu
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Private equity and long-run investm
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alternative names associated with t
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4. Finally, we explore whether firm
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When we estimate these regressions,
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cutting back on the number of filin
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Table 1: Summary statisticsPanel D:
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Table 4: Relative citation intensit
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figuresFigure 1: Number of private
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Private equity and employment*steve
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Especially when taken together, our
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centred on the transaction year ide
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and Vartia 1985.) Aggregate employm
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sectors. In Retail Trade, the cumul
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employment-weighted acquisition rat
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FIguresFigure 1: Matches of private
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Figure 6:Figure 6A: Comparison of n
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Figure 8:Figure 8A: Comparison of j
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Figure 11: Variation in impact in e
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Figure 12: Differences in impact on
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Private equity and corporate govern
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et al (2007) track the evolution of
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groups aim to improve firm performa
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distribution of the LBO sponsors, m
Page 91 and 92: the most difficult cases. This stor
Page 93 and 94: to see whether these changes of CEO
Page 95 and 96: Figure 3:This figure represents the
Page 97 and 98: TablesTable 1: Company size descrip
Page 99 and 100: Table 5: Changes in the board size,
Page 101 and 102: Table 7: Board turnoverPanel A: Siz
Page 103 and 104: Part 2Case studiesThe Global Econom
Page 105 and 106: European private equity cases: intr
Page 107 and 108: Exhibit 1: Private equity fund size
Page 109 and 110: Messer Griesheimann-kristin achleit
Page 111 and 112: ealized it was not possible to grow
Page 113 and 114: The deal with Allianz Capital partn
Page 115 and 116: the deal, the private equity invest
Page 117 and 118: Exhibit 1: The Messer Griesheim dea
Page 119 and 120: Exhibit 5: Post buyout structureMes
Page 121 and 122: New Lookann-kristin achleitnerTechn
Page 123 and 124: feet. This restricted store space w
Page 125 and 126: institutional investors why this in
Page 127 and 128: Although a public listing did not a
Page 129 and 130: Exhibit 5: Employment development a
Page 131 and 132: Chinese private equity cases: intro
Page 133 and 134: Hony Capital and China Glass Holdin
Page 135 and 136: Hony’s Chinese name means ambitio
Page 137 and 138: Establishing early agreement on pos
Page 139 and 140: Executing the IPOEach of the initia
Page 141: Exhibit 1A: Summary of Hony Capital
Page 145 and 146: Exhibit 6A: China Glass post‐acqu
Page 147 and 148: Exhibit 8: China Glass stock price
Page 149 and 150: 3i Group plc and Little Sheep*Lily
Page 151 and 152: y an aggressive franchise strategy,
Page 153 and 154: soul” of the business. But there
Page 155 and 156: Exhibit 1: Summary information on 3
Page 157 and 158: Exhibit 6: An excerpt from the 180-
Page 159 and 160: Indian private equity cases: introd
Page 161 and 162: ICICI Venture and Subhiksha *Lily F
Page 163 and 164: investment,” recalled Deshpande.
Page 165 and 166: 2005 - 2007: Moderator, protector a
Page 167 and 168: Exhibit 3: Subhiksha’s board comp
Page 169 and 170: Warburg Pincus and Bharti Tele‐Ve
Page 171 and 172: founded two companies at this time
Page 173 and 174: By 2003 this restructuring task was
Page 175 and 176: Exhibit 1C: Private equity investme
Page 177 and 178: Exhibit 4B: Bharti cellular footpri
Page 179 and 180: Exhibit 6: Summary of Bharti’s fi
Page 181 and 182: Exhibit 7: Bharti’s board structu
Page 183 and 184: In the 1993‐94 academic year, he
Page 185 and 186: consumer products. She was also a R
Page 187 and 188: AcknowledgementsJosh LernerHarvard
Page 189: The World Economic Forum is an inde
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